Clarifications
on Rules prescribed under the Companies Act, 2013 - Matters relating to share
capital and debentures- reg.
General Circular No. 19/2014, No.
1/4/2013-CL-V, dated 12th June, 2014
Government has received
representations from Industry Chambers, Professional Institutes and other
stakeholders seeking clarifications on matters relating to ‘share capital and
debentures’ under the relevant provisions of the Companies Act, 2013 (Act) read
with relevant rules, which have come into force with effect from 1st
April, 2014. The representations have been examined and clarifications on the
following points are hereby given:-
(i) Share Transfer
Forms executed before 1st April, 2014:-
In view of
prescription of new Securities Transfer Form as per Form SH-4 with effect from
1st April, 2014, the companies and other stakeholders have sought clarity with
regard to Share Transfer Forms executed before 1st April, 2014 as per earlier
Form 7B but which are yet to be accepted/ registered by companies.
The matter has been examined and
it is clarified that since transaction relating to transfer of shares is a
contract between two or more persons/ shareholders, any share transfer form
executed before 1st April, 2014 and submitted to the company
concerned within the period prescribed under relevant section of the Companies
Act, 1956 needs to be accepted by the companies for registration of transfers.
In case any such share transfer form, executed prior to 1st April,
2014, is not submitted within the prescribed period under the Companies
Act, 1956, the concerned company may get itself satisfied suitably
with regard to justification of delay in submission etc. In case a company
decides not to accept the share transfer form, it shall convey the reasons for
such non-acceptance within time provided under section 56(4)(c) of the Act.
(ii) Delegation of powers by board under
rule 6(2)(a):
Clarification
has been sought whether the powers of the Board provided
under rule 6(2) (a) of Companies (Share Capital and Debentures) Rules, 2014
with regard to issue of duplicate share certificates can be exercised by a
Committee of Directors.
The matter has
been examined in light of the relevant provisions of the Act, particularly
sections 179 & 180 and regulation 71 of Table "F" of Schedule I
and it is clarified that a committee of directors may exercise such powers,
subject to any regulations imposed by the Board in this regard.
This issues with
the approval of the competent authority.
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